Pardon Our Dust
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This week was the first full week the state of North Carolina operated under Governor Roy Cooper’s modified stay-at-home order, or Phase 1 of reopening the state. In Phase 1, the essential versus non-essential business distinction was removed, allowing more businesses to open up so long as they do so at 50% capacity, follow proper social distancing measures, and increase sanitary precautions. The Governor’s coronavirus task force plans to wait at least two weeks before moving the state into Phase 2 of reopening, continue operating under the Phase 1 guidelines, or even shifting back to the previous, more restrictive, guidelines. The Governor and his team have assured the public that the decision will be based solely on data and the number of cases throughout the state.
As of Thursday morning, in the state of North Carolina, there were 16,507 confirmed cases of COVID-19, 219,268 completed tests, 615 deaths, 507 current hospitalizations, and 99 of the state’s 100 counties had seen confirmed coronavirus cases. As we all continue to feel the effects of the global pandemic and adjust to a new normal, we want to highlight a few ways our clients across North Carolina have worked to support residents and make this time a little easier for those throughout the state. Read more about what our clients are doing to help by clicking here.
For more information on COVID-19 in North Carolina, click here to visit the Department of Health and Human Services website, and be sure to stay up to date on the latest federal guidelines issued by the Centers for Disease Control and Prevention (CDC) by clicking here.
Session Schedule
This week, several of the House Select Committee on COVID-19 working groups resumed their meetings, getting a jump-start on committee work before the General Assembly reconvenes next week. When lawmakers return Monday, there will be more in-person meetings than before and the building will be open to the public, however, some precautions will remain in place. The legislative building will operate at 50% capacity, individuals will be screened at each point of entry to ensure members of the public are not symptomatic, and visitors are encouraged to limit the amount of time spent in public spaces. Specific rules and provisions in regard to voting practices and committee meetings will be left up to the discretion of either chamber.
Revenue Laws
In a non-COVID-related meeting, the Revenue Laws Study Committee met Wednesday to review draft legislation about the state’s tax code. The Revenue Laws Recommendations bill draft would update North Carolina’s Internal Revenue Code for 2020. However, there are new implications to the state’s tax codes with the passage of the CARES Act by the federal government. The CARES Act includes a number of tax changes that states can either conform to and follow as well or decouple from the changes. Based on the decision of the committee chairs, most of the language in the bill draft addresses the state’s decoupling from the federal provisions.
Legislative staff explained to the committee that if lawmakers choose to conform to the tax provisions outlined in the CARES Act, the state would lose nearly $1 billion in revenue. With the requirement that North Carolina must maintain a balanced budget, and an expected revenue shortfall in the multi-billion dollar range, the committee chairs thought it best to at least begin the process with decoupling from the federal provisions.
While committee members were largely supportive of the bill draft, many expressed concerns over the Paycheck Protection Program (PPP) loan provisions, specifically Sen. Harry Brown (R-Onslow). Through the tax changes in the CARES Act, businesses that receive loans through the PPP will not have those funds taxed at the federal level. If the state chooses to decouple from the federal provisions, the loan funds provided to businesses through the program would be considered taxable income at the state level. A number of committee members shared the same concern as Sen. Brown that a state-level tax on these loan funds would be a disincentive for businesses to apply for the program, resulting in a double hit to those that do accept the PPP funds.
Committee chair Sen. Paul Newton (R-Cabarrus) reassured concerned committee members that the bill language is something that the chairs are willing to continue working on going forward. Sen. Newton also noted that the chairs would be comfortable reversing their position on the provision if the state’s revenue forecast ends up looking stronger than expected. The bill draft passed out of the committee unanimously.
Health Updates
The House Select Committee on COVID-19, Health Care Working Group met Thursday to receive an update on the status of coronavirus in North Carolina, as well as to hear from several industry groups about the impact the pandemic has had.
Department of Health and Human Services (DHHS) Secretary Mandy Cohen presented to the committee an update on the data the Department has collected and posted on their website. Among the information provided to the committee, Secretary Cohen explained the new data released about patient recovery. The Department released a new weekly COVID-19 Patients Presumed to be Recovered summary. Patients are presumed to be recovered 14 days after first testing positive if the individual did not require hospitalization and 28 days after testing positive if the individual does require hospitalization. The latest report estimates North Carolina has 9,115 recovered patients.
Secretary Cohen also spoke to the committee about the state’s testing plan moving forward, including increasing the number of collection sites and expanding access to testing throughout all communities statewide. Sec. Cohen noted that the testing sites will look different in each county based on its characteristics and DHHS working closely with the private sector and local health departments to ensure residents’ needs are met. When asked by Rep. Larry Potts (R-Davidson) why DHHS was relying on the expertise of the individual counties for testing purposes but not allowing the counties to make their decisions on when to reopen, Sec. Cohen explained that the issue is the way residents move throughout the state, living in one county, working in another, and accessing essential services in another. Sec. Cohen noted that a regional reopening approach remains on the table, but DHHS first wants to establish a “floor” for the entire state before allowing individual counties to make their own decisions.
The remainder of the committee meetings was spent listening to presentations from industry groups including, the North Carolina Health Information Exchange Authority, North Carolina Board of Nursing, the Association for Home and Hospice Care of North Carolina, and the North Carolina Assisted Living Association. Throughout the presentations, the need for increased testing abilities and more personal protective equipment were common themes.
Reopening Schools
The House Select Committee on COVID-19, Education Working Group met Thursday afternoon to hear from various state department representatives on school nutrition services, school connectivity, and the framework for reopening.
Representatives from DHHS and the Department of Public Instruction (DPI) presented to the committee an update on how and when schools may be able to reopen in the fall. Susan Gale Perry, Chief Deputy Secretary of DHHS, spoke to the committee about how the Department and DPI have worked together to share information and collaboratively develop ideas for how schools may be able to safely reopen next year while still following public health guidance. During the presentation, Perry outlined four different approaches that could be used to ensure the health and safety of students and staff while allowing children back into the classroom.
The first approach would increase social distancing measures throughout the school building itself. This would include things like moving desks around so students are seated six feet apart, staggering school hours, reducing class sizes, staggering recess, and having students take their meals back from the cafeteria to eat in their classrooms. The second approach would direct schools to implement specific hygiene protocols, such as recommending a cloth face covering all students and staff, frequent cleaning of high-traffic areas, minimizing the use of shared supplies, providing hand sanitizer at every entrance, exit, and classroom door, and incorporating hand-washing breaks into the students schedule each day. The third approach would focus on monitoring staff and student health. This approach would consist of strategies like enforcing sick policies, establishing daily symptom screening at the school entrance, and ensuring that each school has access to mental and behavioral health resources as well as school nurse services. Lastly, the fourth approach would focus on providing education about COVID-19 to students, families, and staff. This approach would include communication from the schools about reopening preparations and providing education and training strategy courses to school personnel.
Perry noted to the committee that the decision-making process surrounding school reopening is still ongoing and that nothing is final, mentioning that all decisions moving forward would be based on the data collected.
Upcoming Legislative Meetings
Monday, May 18
1:00PM Senate: Session Convenes
2:00PM Senate: Commerce and Insurance
2:00PM House: Session Convenes
Tuesday, May 19
8:30AM House: Finance
2:00PM Senate: State and Local Government
Wednesday, May 20
12:00PM Senate: Transportation
Thursday, May 21
9:00AM Senate: Pensions and Retirement and Aging